Frustrated by the West, Tunisia looks East to help its economyhttps://en.majalla.com/node/318626/business-economy/frustrated-west-tunisia-looks-east-help-its-economy
Frustrated by the West, Tunisia looks East to help its economy
Serenaded in Beijing, whose yuan he wants, the Tunisian president has upended half a century of foreign policy to boost a flagging economy and avert unrest ahead of his re-election… But at what price?
AFP
Chinese President Xi Jingping shakes hands with Tunisian President Kais Saied during a memorandum of understanding signing ceremony at the Great Hall of the People in Beijing, on May 31, 2024.
Frustrated by the West, Tunisia looks East to help its economy
When Kais Saied made a state visit to Beijing in May, a Chinese military band treated him to a rendition of the song "Under the Jasmine Tree at Night" by the late great Tunisian artist Hedi Jouini. It went down well. Saied rarely travels abroad. Tunisian diplomats have been told to tell their hosts that when he does, it means it is a priority. So, with Tunisia’s economy badly in need of a Chinese boost, Saied got on the plane.
The state visit was the first of its kind and signalled that Tunisia under Saied had well and truly turned its back on the West to embrace the People’s Republic of China, attending the China-Arab Forum on 28 May.
As his first presidential term comes to an end, Saied’s visit to China heralded a new “strategic partnership”, with seven memoranda of understanding signed. China’s President Xi Jinping said their cooperation would cover areas including green energy, medical and healthcare, water, agriculture, and even media, with a deal signed between Tunis Africa Press Agency and China’s Xinhua News Agency.
Changing direction
Saied’s lavish reception on 31 May at the Great Hall of the People was reminiscent of the warm welcome given to the late Tunisian leader Habib Bourguiba in Washington in May 1961 by the late US President John F. Kennedy. That Washington visit laid the foundation for a Tunisia-US alliance that would last for more than half a century. Since Saied took power in 2019, however, that has changed.
Saied’s conversion is absolute. In their joint closing statement, they said Tunisia affirmed the legitimacy of China “as the sole legal government representing the whole of China”, adding that “Taiwan is an inalienable part of China’s territory”. It also said that “Tunisia supports China’s sovereignty over its entire territory and its efforts to achieve national unity and defend its core interests, including China’s stance against any foreign interference in Hong Kong and Xinjiang”.
Previously, Tunisia avoided such comments because Washington and the West saw Taiwan as an independent democracy. Beijing, on the other hand, sees it as a breakaway region of China. After Saied’s visit, so too does Tunisia.
Saied's supporters see him as moving away from a West they think has exploited Tunisia for decades.
In bed with Beijing
Ahmed Ounis, a former Tunisian foreign minister, says a rapprochement with the East is needed to "strike a balance with the West" while benefiting from a multipolar world. Yet, not everyone is sold. Some warn of the risks of ending a strategic partnership with the West that stretches back seven decades, not least because Europe accounts for 72% of Tunisia's exports and 46% of its imports.
European countries are also Tunisia's top foreign investors, with around 3,000 firms having invested in the country. By comparison, just over a dozen corporate investors from China have invested only $34mn. To put this in perspective, the Chinese owner of TikTok makes that much in seven hours.
Using a food metaphor, a US diplomatic source told Al Majalla that it is "unlikely that Tunisians will quickly replace the American burger with the Chinese Indomie... and they will certainly not like the taste". Nonetheless, Saied's supporters are enthused. They see him taking steady steps toward revolutionary policies on national sovereignty, moving away from a West they think has dominated and used Tunisia for decades.
Against the West
In power since 2019, Saied's eastward shift has been a process. His relations with France and the US have grown especially frosty. In vehement speeches, he has hit out at both, returning to themes of global north/south inequality, colonialism, and exploitation. In this vein, Saied has decried the "devastation" caused by the global financial system, its institutions, and the wider post-war international order, which is now in flux.
With government debt at more than 80% of gross domestic product (GDP), Tunisia began talking to the International Monetary Fund early last year about a $1.9bn financing package, but Saied broke off negotiations, decrying "foreign diktats." With its foreign reserves having fallen from $9.8bn to $6.8bn and with $2.6bn in external debts to be repaid in 2024, Tunisia needed help, but Saied said the IMF's conditions of reform "threaten social peace".
In October 2023, Tunisia returned $64mn to the European Union after a fallout. The EU had given the money to help stop illegal migration from Tunisia's Mediterranean coast to the Italian island of Lampedusa, 113km away. Having ditched the IMF and EU, Saied flew to Tehran to offer his condolences on the death of Iranian President Ebrahim Raisi and to promote closer ties with Iran before flying to China for his meeting with President Xi.
Iran's Supreme Leader Ayatollah Ali Khamenei receiving Tunisia's President Kais Saied in Tehran as leaders offer condolences for the death of the country's president, Ebrahim Raisi, on May 22, 2024.
A seat at the table
A week earlier, Saied agreed to open a Tunisian trade office in the Brazilian city of São Paulo, but he has friends in the region, too. For instance, cooperation with Algeria has rarely been better. Algeria is rumoured to want a seat at the BRICS table alongside founders (Brazil, Russia, India, China, and South Africa) and newer members (Iran, Egypt, Ethiopia, and the UAE), all of which will interest Saied, who has also inched towards Russia.
Yet some economists think Tunisian markets are vulnerable to the dominance of mass-produced products from China, whose manufacturers have even made and exported the traditional Tunisian chechia fez hats. Tunisia has already been swept by a tsunami of cheap Chinese goods, and many now worry that handicrafts and traditional industries may not survive Beijing's cut-price competition.
China tops the list of countries contributing to Tunisia's overall trade deficit, which reached $5.47bn last year. Half of this was accounted for by China. Others included Russia, Algeria, Turkey, and Brazil. One agreement was signed during Saied's visit to Beijing that was related to renewable energy. This is of interest to Europe, which previously bought much of its energy from Russia. The European Council on Foreign Relations said China had become a "pioneer in the field of renewable energy, qualifying it to provide expertise to North African countries at a good price".
Ports and landing points
In January, Tunisian trade minister Kalthoum Ben Rejeb and Chinese trade minister Tang Wenhong met to reaffirm the "alignment of visions between the two countries at all levels and in all fields." They also announced Tunisia's intention to turn the Ras Jedir Crossing on the Tunisia-Libya border into a gateway to Africa, with China called upon to support the project. Weeks later, in March, the Tunisian government signed an agreement with the Sichuan Road and Bridge Company to build a bridge in the city of Bizerte in northern Tunisia. Officials say it will support the city's port, boosting trade between Tunisia and Algeria.
The US website Capital Intelligence reported on competition between the US, China, and France for control of the deep-water port in Bizerte. This port is an important landing point for subsea cables connecting the US and Europe with Asia and the Middle East.
For almost 20 years, Bizerte has been a major landing hub for the 18,800km long SeaMeWe-4 fibre optic cable linking Europe, the Middle East, East Africa, the Gulf, South Asia, India, and South-East Asia. It is also now a landing point for the 15,000km Chinese-made, Hong Kong-operated Peace cable. Launched in 2022, it connects Tunisia to Europe, with the main cable running from France to Egypt, along with extensions to Pakistan and Kenya.
Chinese firms were also considering other projects, including a port expansion scheme at Zarzis in the south of Tunisia and a rehabilitation project for the port of Enfidha in the northeast, but Tunisian authorities rejected all proposed offers. China does not hide its deep interest in Tunisia's commercial ports, along with others in the Maghreb, as part of its colossal geostrategic investment strategy, the Belt and Road Initiative, of which Tunisia became a part in 2018.
Archaeological site of Carthage, Tunisia
Building relations
For years, Tunisia was not even on China's political radar due to its ties with the US and Europe, so Beijing focused its investments in Morocco, Algeria, and—to a lesser extent—Libya. The European Foreign Affairs Committee says that changed in 2018. Earlier this year, China's chief diplomat honoured a tradition of marking their overseas debut with a visit to Africa, this time choosing Tunisia.
Formal trade relations began in 1958, and diplomatic relations were established in 1964, but it was only in 1983 that the Chinese-Tunisian Joint Committee for Economic, Trade, and Technological Cooperation was established to develop bilateral commerce. More recently, there has been friction. In November 2019, China was accused of spying on the Tunisian parliament via the Chinese telecoms firm Huawei, which had distributed computer tablets to MPs. The US had warned Tunisia against using Huawei equipment in upgrades to power 5G networks, but Western influence was waning, and China's weight was growing.
Tunisia has also moved closer to Russia, including via a partnership with the two states' electoral bodies and deeper energy ties since 2023, as Moscow sought new markets to soften the impact of sanctions after its invasion of Ukraine. Reuters data from Keller Analytics shows that Tunisia's Russian gas and diesel imports rose by more than 300% between January 2022 and February 2023, from 25,000 barrels per day (bpd) to 77,000 bpd.
The US diplomatic source cited several factors that have turned Tunisian heads from West to East, including a 70% public disapproval rating of America since Israel's war on Gaza and "the cooling in relations with the new authorities due to differences in the political agenda, primarily concerning democratic values".
While the diplomat did not elaborate, a second Saied term seems certain, given that he has locked up all his political rivals, purged the judiciary, and stoked racism by warning that "hordes" of black African immigrants are bringing "violence, crime, and unacceptable practices", and plotting to replace Tunisia's Arab majority.
With Saied hardening his stance toward Israel and Arab normalisation efforts with it, it is difficult to imagine an American military band playing "Under the Jasmine Tree at Night" for a state visit any time soon.
